While UK-only for now, poker and other casino games could come to US this year.

On Wednesday, Zynga launched its online poker and casino games in the United Kingdom, the first proof that the company’s previously announced pivot away from social gaming and toward “real-money” gaming is for real.

“Launching the download and web versions of Zynga’s real money games for play in the UK is an exciting move to bring players the real money games they have been asking us for,” wrote Barry Cottle, the company’s chief revenue officer, on a company blog on Tuesday evening. “We look forward to launching our social versions of real money games for players on Facebook and mobile in the UK throughout 2013.”

Shareholders responded very positively: Zynga’s stock is up about 15 percent on the day. This new announcement and stock surge are some much-need positive news for the beleaguered social gaming company.

Zynga's roller coaster ride

Since August 2012, we’ve been tracking Zynga’s rapid fall. The company lost top managerial talent and its stock price plummeted,it acknowledged that it overpaid for OMGPOP, and it racked up quarterly losses to the tune of $52 million. In February 2013, the San Francisco startup announced it lost more than $200 million in 2012.

Analysts told Ars that the new British scheme would likely not impact Zynga’s bottom line in the immediate future, but it could set the stage for eventual expansion to the United States. Various states are moving ever-closer to legalizing and launching online gambling within state borders—New Jersey and Nevada are expected to be the first, with California, Illinois, and Delaware not far behind.

“It is a test, they know going in that there are a lot of reasons for it to work and a lot of reasons for it not to work,” Sean McGowan, an analyst with Needham & Co., told Ars.

“How many [Facebook users] will convert [to gambling online]? How sticky is it? How much testing is there? Those are the things you might be able to extrapolate to other markets.”

After all, as we reported in February, Zynga filed a “preliminary finding of suitability” late last year with the Nevada Gaming Control Board, the first step toward offering real-money gambling in the US.

"These are all steps that are moving us toward our long-term vision in real money games," the company's chief operating officer, David Ko, told investors in February 2013.

Still could be a couple of years before this bet pays out

Given the company’s recent setbacks, Zynga really needs a win—and if that comes via real people gambling real money, then all the better.

“There is still a stigma attached to gambling where some users are more prone to spend more real (or virtual) money so some caution is needed from Zynga and users to make sure users don't get into situations beyond their control,” Brian Blau, an industry analyst with Gartner Research, told Ars.

“But for users that just want to enjoy a few simple games of slots or poker, real money gaming is a way to get your fix, and with Zynga's games you can share your results, play with friends, and have a more social experience similar to what you would find a real world casino.”

James Cakmak, a financial analyst at the Telsey Advisory Group, generally agreed—and he was overall bullish on Zynga’s prospects over the longer-term.

“I think it's a really good story right now, but I don't expect the bwin.party partnership to provide any meaningful contribution to the company's finances over near-term. The most important takeaway is going to be the knowledge that Zynga can leverage [online gambling] for the US.”

Various states are moving ever-closer to legalizing and launching online gambling within state borders—New Jersey and Nevada are expected to be the first with California, Illinois, and Delaware not far behind

Could you lease a range of static IP addresses from an ISP in one of these states and then rent them to players outside for a nominal fee to get around the"within state borders" requirement?

It will be interesting to see if the uptick holds: Obviously, a strategy that makes it easier to customers to lose real money provides a more obvious route to profit; but my impression is that(outside of the US, where its illegality has kept production values rather low) online gambling isn't exactly a delicate fledgling industry full of starry-eyed noobs ready for Zynga to crush.

If investor confidence was basically shaky because Zynga didn't have a good mechanism for extracting cash from customers fast enough, this move should resolve that problem just fine.

If investor confidence is shaky because Zynga has been flailing a bit in terms of reeling in new suckers, is having trouble with churn, has had difficulty launching/buying new IP that is as successful as the (now fading) classics, etc., then online gambling doesn't solve any of their structural problems; but merely allows them to bring the same baggage to another market...

Various states are moving ever-closer to legalizing and launching online gambling within state borders—New Jersey and Nevada are expected to be the first with California, Illinois, and Delaware not far behind

Could you lease a range of static IP addresses from an ISP in one of these states and then rent them to players outside for a nominal fee to get around the"within state borders" requirement?

Personally, I hate contributing to the enrichment of shady and slimy characters, which is why I don't use web services like yelp or facebook/zynga. Fortunately for them, there are millions and millions of morons out there who will gladly hand over their hard-earned cash in exchange for nothing.

Personally, I hate contributing to the enrichment of shady and slimy characters, which is why I don't use web services like yelp or facebook/zynga. Fortunately for them, there are millions and millions of morons out there who will gladly hand over their hard-earned cash in exchange for nothing.

I agree completely but gambling is almost less sleazy than the selling "virtual goods" to the whales. At least there is a chance that you get something out of it and the act of gambling in itself is somewhat entertaining.

You would have to be INSANE to trust Zynga with your money. Zynga's unethical activities would shame even the most callous Wall St. executives. I would bet my life savings that the code behind the Zynga poker application is rigged.

Unfortunately, the legality on the federal level is more to support the laws on the state level. The situation is... murky.

In 2006, the Unlawful Internet Gambling Enforcement Act was passed, and it "prohibits gambling businesses from knowingly accepting payments in connection with the participation of another person in a bet or wager that involves the use of the Internet and that is unlawful under any federal or state law." This is when state laws come into play, because federal law is still unclear. If you live in a state which is very strict on gambling, this combined with the UIGEA makes online poker more difficult (and possibly illegal) to move money to and from your bank accounts to these poker sites. Not impossible, but much more difficult, and with extra fees.

(Disclaimer: I do not condone breaking, or bending, any laws. Become educated in the laws of your state if you are a US resident. I am not a lawyer, and I am not responsible for any actions you take as a result of this post.)

You would have to be INSANE to trust Zynga with your money. Zynga's unethical activities would shame even the most callous Wall St. executives. I would bet my life savings that the code behind the Zynga poker application is rigged.

Since you're playing against other players, I assume Zynga is just happy with the rake. They'd win no matter what.

I stupidly purchased some Zynga stock shortly after the IPO which I still (stupidly) own. Anyway I wouldn't call it a 'surge' when the peak stock prices in the past two months were higher than it is after this 'surge'. I love your content ARS, but this headline is pretty 'meh'. Let me know when I only took a 50% loss on ZNGA instead of this near 75% loss which I'm still at.

You would have to be INSANE to trust Zynga with your money. Zynga's unethical activities would shame even the most callous Wall St. executives. I would bet my life savings that the code behind the Zynga poker application is rigged.

Considering every casino ever has their machines rigged in their favor, this would be an extremely safe bet. Safe enough that there's really no reason to even bother taking it.

When your company is floundering because its business model and top execs are garbage-spewing charlatans, turn to vices! They should diversify and sell cigarettes and booze to the poker players.

It's actually possible to win a real cigar in the online Bitcoin casino/MMOG Dragon's Tale:"There are 4 new types of Cigars in Dragon's Tale that offer a 1 in 50 chance of winning you a real cigar, to be shipped to you in the mail."

The game's designer, Teppy (Di in game), is a huge cigar fan. I used to play his other game, A Tale in the Desert, quite a bit years ago. I've popped into Dragon's Tale a few times and said hi, and surprisingly he remembered me. When I asked him about the game, one of the first things he said was "We have a way to earn real cigars by smoking in-game cigars." Classic Teppy.

It would actually be pretty interesting to read an Ars article on Dragon's Tale, especially the legal side. My basic understanding is that they've had to move the server because of laws, though right now I'm not sure if it's back in the US or still in Costa Rica.

I am completely unsurprised by this, since most companies involved in computer games, (especially such 'facebook' games etc.), have come to realise that competitions, not games, make the most money, which always tends to lead to gambling in one way or another.

At least they're making it obvious that that's what they're doing, and not doing their best to 'hide' the gambling behind or inside other activities, which is what we all need to be afraid and wary of, (and should be made illegal if it isn't already), however, which is good.

The biggest problem is companies turning their games into competitions either without realising it, or deliberately doing so and yet still calling them 'games'. (*Cough* Acti-Blizzard and Diablo 3 *cough*). Since they are now competitions and not games, the line between such activities and gambling is much, much thinner and more likely to be crossed, at most expense of games themselves.

Game: a structured activity in which people compete by doing something 'for themselves'.Competition (3): an activity in which people compete to be told whether or not they have won or lost, (usually by a random draw or a 'judges' opinion etc.).

There's just something about it that makes me go "Dafuq?" I can't put my finger on it, but it just feels dirty somehow, like the person who designed it was consciously appealing to something hidden away deep in the human psyche.

You would have to be INSANE to trust Zynga with your money. Zynga's unethical activities would shame even the most callous Wall St. executives. I would bet my life savings that the code behind the Zynga poker application is rigged.

Considering every casino ever has their machines rigged in their favor, this would be an extremely safe bet. Safe enough that there's really no reason to even bother taking it.

As someone who worked IT in casinos for years, there is no "rigging".

Machines have algorithms that pay out at truly random intervals, but overtime, they only pay out a percentage they take in. The overall payout rate for all slot machines on the floor is usually displayed publicly, as a requirement by law.

Let's say you're playing on a machine that pays out 97%. So you pull $100 in, and on average, it will pay back $97. However, the real trick is re-investment. So while playing your $100, you hit a $5 jackpot. You don't immediately cash out. You just keep playing. So you're reinvesting your winnings.

So you get back 97% of that $97 the next time, lather rinse and repeat.

It isn't "rigged" or cheating. The odds are just in the house's favor over time.

It is possible for any player to get lucky and win more than they lose in the short-term, but they won't long term. That is why they need to see slot machines as an entertainment expense. It isn't really an opportunity to make money.

Various states are moving ever-closer to legalizing and launching online gambling within state borders—New Jersey and Nevada are expected to be the first with California, Illinois, and Delaware not far behind

Could you lease a range of static IP addresses from an ISP in one of these states and then rent them to players outside for a nominal fee to get around the"within state borders" requirement?

No you can't. You have to be licensed by the respective gaming boards in the area to be able to allow users to play your slots/casinos/whatever whether it's online or in a brick and mortar. The process for getting licensed in each states is both costly and time consuming.